REF/2007/0274

 

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

LAND REGISTRATION ACT 2002

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

BETWEEN

BLACKRAVEN DEVELOPMENTS LTD

Applicant

and

(1) SAPPHIRE (HARLOW) NOMINEE LTD

(2) SAPPHIRE (HARLOW) (No 2) NOMINEE LTD

Respondents

 

Property Address: 41 Harvey Centre, Harlow, Essex CM20 1XP and other property

 

Title Numbers: EX320085 and others

 

Before: Mr Simon Brilliant sitting as Deputy Adjudicator to HM Land Registry

 

Sitting at: Procession House, 110 New Bridge Street, London EC4V 6JL

 

On: 16 November 2007

 

Applicant’s Representation: Mr Mo Ghadami, company director.

 

Respondent’s Representation:         Ms K Holland of counsel.

 

 

DECISION

 

Jurisdiction to determine underlying issues or make other substantive orders after objection to the original application withdrawn – appropriateness of summary applications to the Chancery Division – issue as to agreement as to costs

 

Ghadami v (1) Harlow District Council and (2) Sapphire Retail Fund Ltd [2004] EWHC 1883 (Admin), UCB Group Ltd v Hedworth [2004] EWHC 1138 (Ch), EF Clarke (Goldsmiths) Ltd v William Sapcote & Sons Ltd [2006] EWHC 2870 (Ch), Red River (UK) Ltd v Sheikh [2007] EWHC 2654 (Ch).

 

Introduction

 

1.         In this case the applicant withdrew his objection to the original application made to Land Registry shortly before I was due to make a substantive decision on the merits.  This is my decision on costs and certain other issues which arose in these circumstances.  Those other issues are as follows:

 

(1)        Should I join Mr Ghadami as a second applicant?

 

(2)        Do I retain jurisdiction to determine the underlying issues between the parties?

 

(3)        If it would otherwise be appropriate, do I retain jurisdiction to direct the registrar, under rule 41(2) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, to reject any future applications by the applicant or Mr Ghadami of a specified kind?

 

The original application

 

2.         The respondents to this reference are 2 limited companies controlled by Mr Simon Reuben.  They are the owners, under 7 registered titles, of what I shall for convenience refer to as the Harvey Centre, Harlow (“the Centre”), which is a substantial retail shopping centre.

 

3.         The applicant is a limited company, controlled by Mr Mo Ghadami, which claims to have an equitable interest in the Centre by way of proprietary estoppel.  This estoppel is said to have arisen in the course of negotiations relating to a proposed development of the Centre, which took place between Mr Reuben and others, on behalf of the respondents, and Mr Ghadami, on behalf of the applicant, during 2006.

 

4.         Following the break down of the negotiations, Mr Ghadami applied on 17 November 2006, on behalf of the applicant, for a series of unilateral notices to protect the rights claimed by the applicant in the Centre.

 

5.         A unilateral notice was entered on each of the relevant registers on 20 November 2006:

 

in respect of equity by estoppel arising from a promise of the ownership by sale/purchase of the said property made between (1) Simon Reuben, Robin Malcolm Tuner, Alan McLeod for and on behalf of the shareholders/ owners/ directors of Sapphire (Harlow) Nominee Ltd and Sapphire (Harlow) (No 2) Nominee Ltd and (2) Mohammad Reza (Mo) Ghadami of Blackraven Developments Ltd. 

 

6.         The beneficiary of the notice was stated in each register to be:

 

Mohammad Reza (Mo) Ghadami of Blackraven Developments Ltd (Co Regn No 05274096) Paradise Lodge, Netteswell Hall, Park Lane, Harlow, Essex CM20 2QH. 

 

7.         In his oral evidence Mr Ghadami told me that this was his business address, not his personal address.

 

8.         Notices are dealt with in sections 32-39 of the Land Registration Act 2002. A unilateral notice is a unilateral hostile entry, as was the caution against dealings available under the Land Registration Act 1925.  It will be entered on the register without investigation and it is subject to a cancellation procedure. A person in whose favour a unilateral notice has been entered is known as the beneficiary of the notice.

 

9.         If the registrar enters a unilateral notice in the register, he must give notice of the entry to the registered proprietor of the estate or charge to which it relates. A person may apply to the registrar to cancel a unilateral notice if he is the registered proprietor of the estate or charge to which the notice relates or is the person entitled to be so registered.

 

10.       On 1 December 2006 the respondents made an application (“the original application”) to cancel the various unilateral notices.

 

11.       The beneficiary of the notice must be given notice of the application to cancel, and if he does not object to the application within the prescribed period, the registrar must cancel the unilateral notice.

 

12.       The only person who can object to an application to cancel a unilateral notice is the person shown in the register as the beneficiary of the notice to which the application relates (section 73(3) of the Land Registration Act 2002). Where an objection is made to the registrar, unless he considers it to be groundless, he may not determine the application until the objection has been disposed of (section 73(5) of the Land Registration Act 2002). If it is not possible to dispose by agreement of an objection, the registrar must refer the matter to the adjudicator (section 73(7) of the Land Registration Act 2002).

 

13.       On 9 January 2007 Mr Ghadami, on behalf of the applicant, objected to the original application. 

The reference

 

14.       The dispute was referred to the adjudicator under section 73(7) of the Land Registration Act 2002 on 27 February 2007. The applicant has at all times during the dispute acted through Mr Ghadami, who appeared before me.  The respondents have instructed Taylor Wessing and Ms Holland appeared before me.

 

15.       For a detailed procedural history of the reference to the adjudicator, see my decision dated 16 October 2007 at pages 243-249 of the trial bundle.  For an earlier and successful application by Mr Ghadami for judicial review of planning permission granted in respect of the Centre by the local authority to a  developer, see the decision of Richards J (as he then was) in Ghadami v (1) Harlow District Council and (2) Sapphire Retail Fund Ltd [2004] EWHC 1883 (Admin).

 

16.       The applicant was named by the adjudicator as the applicant in the reference as he bears the burden of proving the interest he claims by way of proprietary estoppel in the Centre.

 

17.       The respondents’ case is that the applicant’s statement of case and supporting documents do not disclose any evidence in support of his claim.  Ms Holland says in paragraph 4.4 of her skeleton:

 

            It can be seen that there is nothing in any of the material presented on behalf of the applicant that even comes close to establishing any of the necessary requirements for the existence of an estoppel interest.

 

The direction of a preliminary issue

 

18.       The adjudicator does not at present have any power to enter summary judgment, although draft amendments to the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 already published will in due course remedy this deficiency.  But there is power for the adjudicator to hear a preliminary issue under rule 31 of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, which provides:

 

(1)        At any time and on the application of a party or of his own motion, the adjudicator may dispose of any matter or matters that are in dispute as a preliminary issue.

 

(2)        If in the opinion of the adjudicator the decision on the preliminary issue will dispose of the whole of the matter then the decision on the preliminary issue must be – 

 

(a)        made in accordance with the provisions in these Rules on substantive decisions; and

 

(b)        treated as a substantive decision.

 

19.       Rule 2(1) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 provides:

 

A substantive decision means a decision of the adjudicator on the matter or on any substantive issue that arises in it but does not include any direction in interim parts of the proceedings or any order as to costs or any order as to costs thrown away.

 

20.       After both sides’ statements of case had been served, the file was looked at by an adjudicator as a matter of routine case management.

 

21.       Having read the file, Mr Michael Mark, a deputy adjudicator, made a direction on 2 August 2007 for a 1 day preliminary issue to be listed.

 

22.       The preliminary issues thereby ordered were as follows:

 

(1)        Whether the facts and matters pleaded by the applicant in its statement of case and disclosed by the documents enclosed with that statement of case entitle the applicant, if proved, to maintain the unilateral notices which the respondents seek to have cancelled.

 

(2)        Whether the applicant has any real prospect of success in this reference or whether the adjudicator should now direct the chief land registrar to cancel the unilateral notices.

 

(3)        Whether a direction should be given to the chief land registrar under rule 41(2) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003.

 

(4)        Whether any and if so what order should be made at this stage with regard to costs.

 

23.       It was also stated that consideration would be given as to whether Mr Ghadami should be personally joined as a second applicant.

 

24.                   Rule 41 of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 provides:

 

(1)        Where the adjudicator has made a substantive decision on a reference, the substantive order giving effect to that substantive decision may include a requirement on the registrar to - 

 

(a)        give effect to the original application in whole or in part as if the objection to that original application had not been made; or

 

(b)        cancel the original application in whole or in part.

 

(2)        A requirement on the registrar under this rule may include – 

 

(a)        a condition that a specified entry be made on the register of any title affected; or

(b)        a requirement to reject any future application of a specified kind by a named party to the proceedings – 

 

(i)         unconditionally; or

 

(ii)        unless that party satisfies specified conditions.

 

25.       My understanding of Mr Mark’s direction was that there was to be no oral evidence, but that the whole of Mr Ghadami’s evidence would be treated for the purposes of the hearing as being factually correct. 

 

26.       The direction envisaged that, unless Mr Ghadami satisfied me that the applicant had a real prospect of success on establishing a proprietary estoppel on the assumed facts, I must direct the registrar to give effect to the original application and to cancel the various unilateral notices.  But if I found that the applicant had a real prospect of success on the assumed facts, then there would have to be a full hearing.

 

27.       Following an opposed application for an adjournment, the preliminary hearing was directed by me to be heard on Friday 16 November 2007.

 

The withdrawal of the objection

 

28.       At 1015 on Tuesday 13 November 2007 Mr Ghadami sent a letter by email to Land Registry, which included the following:

 

            I write to confirm that I have NO OBJECTION to the application for the cancellation of the unilateral notices in form UN4 dated 01 December 2006, with the date of application being 04 December 2006.

 

29.       On the same day Land Registry wrote to Mr Ghadami:

 

            Thank you for your letter dated 13 November withdrawing the Company’s objection to the application for the cancellation of the unilateral notices on the above titles.

 

            The Registry has advised the Office of the Adjudicator accordingly and has notified the other side.

 

            We will now give effect to the cancellation of the unilateral notices in the view of the fact that your objection to the cancellation has now been withdrawn.

 

30.       Land Registry also wrote on the same day to the adjudicator:

 

            I am pleased to be able to inform you that I today heard from Blackraven Developments Ltd, being the objectors in this matter, withdrawing their objection to the application that has been made to cancel the unilateral notices in their favour on the above numbered titles.  Given the fact that the disputed application to cancel the unilateral notices can now proceed; this effectively brings the subsisting dispute to an end.

 

            The above renders any potential hearing by the Adjudicator or his deputies unnecessary now that the objection to the application to cancel the unilateral notices has been withdrawn.

 

            I hope that this will enable you to note your records accordingly and to strike out this matter from your records.

 

31.       On Wednesday 14 November 2007 Land Registry completed the original application, in other words it duly cancelled the unilateral notices and altered the relevant registers by removing them.  Notice of this and copies of the up to date registers were sent out to Taylor Wessing that day.  This fact was also drawn to my attention on that day and I asked a member of the administrative staff to telephone both sides to say that the hearing would still go ahead on the question of costs.

 

32.       I wanted to make it clear that there would still be a hearing on Friday 16 November 2007. This was because, by Wednesday 14 November 2007, Mr Ghadami was sending emails claiming that there had been an agreement with him whereby, if he withdrew the objection to the original application, there would be no order as to costs.  Accordingly, he was suggesting there was no need for any attendance. Taylor Wessing vigorously denied any such agreement.

 

33.       I now turn to the issues before me.

 

Should I join Mr Ghadami as a second applicant?

 

34.       The respondents regard the applicant, no doubt correctly, as the alter ego of Mr Ghadami.  Ms Holland argues that in the documents Mr Ghadami often states that it is he who has the interest in the Centre by reason of proprietary estoppel.  In fact the position is ambiguous in that, as a layman, Mr Ghadami often fails to distinguish between himself and the applicant.

 

35.       The applicant’s evidence is based on a series of email exchanges during 2006. Most of the emails are sent from or to Mr Ghadami at an email address containing the name of the applicant.  But a significant number are sent from or to Mr Ghadami at an email address which is clearly a personal one.

 

36.       Panel 12 of each of the forms UN1 is typical of the ambiguity:

 

(1)        This declaration is made by Mohammad Reza (Mo) Ghadami of BlackRaven Developments Ltd, Paradise Lodge, Nettlesewell Hall, Park Lane, Harlow, Essex CM20 2QH.

 

(2)        I have an interest (my emphasis) in the land and property under the title number … because I have equity by estoppel arising from a promise of the ownership by sale/purchase of the said property made between Simon Reuben, Robin Malcolm Turner, Alan McLeod for and on behalf of the shareholders/ owners/ directors of Sapphire (Harlow) Nominee Ltd and Sapphire (Harlow) (No 2) Nominee Ltd AND Mohammad Reza (Mo) Ghadami of Blackraven Developments Ltd (my emphasis) in or about early 2006 up to the time of writing.  They are now acting in a way that is detrimental on the basis of that promise.

 

(3)        HM Land Registry are therefore requested to enter a unilateral notice against title number … to protect Blackraven Developments Ltd’s position (my emphasis), pursuant to section 116 of the Land Registration Act 2002.

 

37.       I am satisfied from looking at the evidence as a whole that at all material times Mr Ghadami was acting on behalf of the applicant, although at times he may have expressed himself less clearly than a lawyer would have done. 

 

38.       On the day that the respondents made the original application, Taylor Wessing wrote to the applicant explaining what the respondents were doing (see page 126 of the trial bundle).  That letter did not even mention Mr Ghadami by name. The objection to the original application was written by Mr Ghadami on the applicant’s notepaper (see pages 69-71 of the trial bundle).  In a letter shortly thereafter to Land Registry, Taylor Wessing referred to the applicant as the person from whom the objection had been received and said that the firm did not wish to negotiate with the applicant (see page 72 of the trial bundle).

 

39.       The only person who can object to an application to cancel a unilateral notice is the person shown in the register as the beneficiary of the notice to which the application relates.  Land Registry clearly regarded the applicant as the beneficiary of the notice despite the somewhat ambiguous entry in the register (see paragraph 6 above) because notice of the original application was served on the applicant and not Mr Ghadami personally (see page 141 of the trial bundle).  In the reference to the adjudicator the applicant, and not Mr Ghadami, was clearly named as the objector (see page 171 of the trial bundle).

 

40.       I am satisfied that the applicant was the beneficiary of the unilateral notices, the legal person objecting to the original application and the correct party to the reference to the adjudicator.  I therefore decline to add Mr Ghadami personally as a party.

Do I retain jurisdiction to determine the underlying issues between the parties?

 

41.       In her skeleton argument Ms Holland stated that:

 

… the respondents continue to seek full determinations of the matter in order to bring this matter to a final conclusion and to prevent the applicant or Mr Ghadami seeking to re-open the matter at a later date.

 

42.       I told Ms Holland at the outset of the hearing that I was unable to accept this submission.  The effect of the applicant withdrawing its objection to the original application was to bring my jurisdiction over the substantive dispute to an end, save for the question of costs.

 

43.       To understand why that it is, it is necessary to set out the basis of my jurisdiction.

 

44.       The adjudicator’s office was newly created by Part 11 of the Land Registration Act 2002.  The adjudicator is wholly independent of Land Registry, is subject to the supervision of the Administrative Justice & Tribunals Council, and has his own procedural rules, the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003.

 

45.       The principal jurisdiction of the adjudicator is to determine disputes between parties arising out of applications to the registrar, which have been referred by the registrar under section 73(7) of the Land Registration Act 2002: see section 108(1)(a) of the Land Registration Act 2002.  The parties themselves do not initiate such proceedings before the adjudicator.  This jurisdiction can only be exercised following a reference by the registrar.  The function of the adjudicator is to determine the underlying dispute between the parties.  His decision is regarded as a final determination and will be binding on the parties and their successors in title.  The adjudicator is not simply a filter weeding out applications which have no reasonable prospects of success.

 

46.       This focused but limited jurisdiction of the adjudicator is reflected in the relief he gives.  At the conclusion of the proceedings the adjudicator will usually order the registrar either to give effect to the original application in whole or in part, as if the objection to that original application had not been made, or to cancel the original application in whole or in part (see rule 41(1) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, set out at paragraph 24 above).

 

47.       The adjudicator retains his jurisdiction unless and until agreement is reached in respect of the original application.  But if before the substantive decision is reached the dispute which has been referred to him comes to an end because:

 

(1)        the original application itself is withdrawn, or

 

(2)        the objection to the original application is withdrawn,

 

there is no longer a dispute upon which to adjudicate.   In those circumstances the jurisdiction of the adjudicator comes to an end, except in respect of costs arising since the date of the reference.

 

48.       For these reasons I declined to try the underlying issues between the parties.

 

Rule 41(2) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003

 

49.       Ms Holland then invited me, nevertheless, to make a direction to the chief land registrar under rule 41(2) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 to reject any future application by Mr Ghadami or the applicant to enter a notice on any of the registers relating to the Centre.

 

50.       Her concern is understandable.  Her case is that the original application lacked any merit.  The respondents’ statement of case asserts:

 

            The registration of the unilateral notices … are causing real prejudice to the respondents.  The respondents currently have a number of outstanding lease renewals with various tenants of the subject premises.  These tenants are unwilling to complete the renewal leases until such time as the unilateral notices are removed.  There is therefore a possibility that any number of these tenants may decide to walk away from the proposed deals reached with the respondents, and the respondents may be left with empty shop units, suffering losses as a result.

 

51.       Ms Holland submitted that Mr Ghadami had simply pulled the dispute before it could be decided and that he on behalf of the applicant was free to enter a further set of notices at his will.  Mr Ghadami has refused in the last few days to give any assurance that he would not do this.

 

52.       I pointed out to Ms Holland that, as I no longer had any jurisdiction over the underlying issue, I could no longer make a substantive order.  There was therefore nothing to which I could attach a rule 41(2) direction.  Ms Holland urged me not to take such a modest view of my powers.  She argued that Parliament could not have intended that the system of notices could be abused in this way.

 

53.       During the course of argument I queried why, in the 12 months since the unilateral notices were entered, the respondents had not sought to remove them by application to the Chancery Division.  The referral of a dispute to the adjudicator by the registrar is no bar to one of the parties electing to commence court proceedings.  If such proceedings are commenced, the adjudicator has a discretion to adjourn the whole or part of the proceedings before him pending the outcome of the court proceedings: see rule 11 of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003.

 

54.       I referred Ms Holland to UCB Group Ltd v Hedworth [2004] EWHC 1138 (Ch) in which Keith J, sitting in that division, gave summary judgment in favour of the party seeking the removal of a unilateral notice.  He also considered that he had the power to grant an injunction restraining any further application to the Land Registry relating to the title to the property, but on the facts declined, at that time, to make such an order.

55.       Since the hearing, the decision of Briggs J in Red River (UK) Ltd v Sheikh [2007] EWHC 2654 (Ch) has been published.  In that case the learned judge made an interim injunction restraining the defendants from making certain applications to Land Registry in respect of the property at the centre of the dispute.

 

56.       Ms Holland responded by referring me by name to EF Clarke (Goldsmiths) Ltd v William Sapcote & Sons Ltd [2006] EWHC 2870 (Ch), in which she had appeared. This case can be found online on Estates Gazette.  An owner made a summary application to the Chancery Division to remove a caution registered against his title some years earlier.  There were proceedings afoot before the adjudicator but the owner needed the caution to be removed urgently, as an intending purchaser would not otherwise complete. Pumfrey J (as he then was) expressed the view that the adjudication system needed to work more quickly in order to avoid the courts being filled with applications to remove impediments from the register.

 

57.       But in that case the learned judge had held that the application to him had been entirely reasonable and the claimant was awarded its costs, even though by the time of the hearing the cautioner had agreed to the removal of the caution.

 

58.       The apparent criticism made by the learned judge was of concern to the adjudicator.  Transcripts of the judgment of the hearing on 13 October 2006 and of a subsequent judgment by Master Teverson on 5 October 2007, relating to a claim for compensation under section 56(3) of the Land Registration Act 1925, have been obtained.  The position is that on 25 January 2006 the owner applied to Land Registry to cancel the caution.  The dispute was not referred to the adjudicator until 14 July 2006.  The parties duly served statements of case in compliance with, and within the time limits set by, the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003.  On 6 October 2006 the owner applied in the Chancery Division for the summary removal of the caution.  This was less than 3 months after the reference to the adjudicator.  Furthermore, the file reveals neither party expressed any concern about the urgency of the decision to be made by the adjudicator.

59.       Practitioners should not be reluctant, in an appropriate case, to make an application to the Chancery Division for the summary removal of a unilateral notice, and are encouraged to make an application under the inherent jurisdiction in cases of real urgency, given that the adjudicator does not yet have a power of summary disposal.

 

60.       I mention this because my inability to make a direction under rule 41(2) does not, in my judgment, leave the respondents vulnerable to any actions taken in the future by Mr Ghadami or the applicant, should such actions be found to be an abuse.

 

61.       My ruling, therefore, is that I have no jurisdiction to make a direction under rule 41(2) directing the registrar to reject any further applications by Mr Ghadami or the applicant to enter unilateral notices in respect of the Centre.

 

62.       I appreciate that this is a new jurisdiction and the argument raised is a serious one and of general interest.  I will grant the respondents permission to appeal, limited to this issue, under CPR 52.3(6)(b).  Despite what is said in the penultimate paragraph of White Book 52.3.7, I would regard a single judge of the Chancery Division as an appropriate forum for this appeal on a point of principle affecting this jurisdiction.

 

Costs

 

63.       Naturally, the usual rule is that if a party withdraws the original application, or withdraws the objection to the original application, causing the reference to come to an end, that party must pay the other party’s costs before the adjudicator.

 

64.       Mr Ghadami says that the normal rule should be displaced because of an agreement reached between the parties that, if the applicant were to withdraw its objection to the original application, then there should be no order as to the costs of the proceedings before the adjudicator.  Mr Ghadami says the agreement was reached during telephone conversations between himself and Mr Reuben.  Alternatively, the agreement was reached when he accepted a without prejudice offer to this effect made to him by Taylor Wessing. The respondents deny any such agreement.  This is an issue I need to determine before the question of assessing the costs arises.

 

65.       Mr Ghadami gave oral evidence.  Ms Holland called her instructing solicitor, Ms Leonard, who gave evidence about 2 telephone conversations she had with Mr Ghadami.  Following the oral hearing, Ms Holland put in a witness statement under the Civil Evidence Act 1995 from Mr Reuben.  Mr Ghadami served a witness statement in reply.

 

66.       I am quite satisfied on the evidence before me that Mr Reuben never agreed with Mr Ghadami that, if the applicant were to withdraw its objection to the original application, then there should be no order as to the costs of the proceedings before the adjudicator.

 

67.       Dealing first with the without prejudice offers, at 1054 on Tuesday 13 November 2007 Taylor Wessing emailed an offer to Mr Ghadami. The offer was that if by 12 noon Mr Ghadami withdrew the unilateral notices, and confirmed in open correspondence that he had no claim against the respondents and certain others, then the respondents would not pursue a claim for costs.  At 1141 Mr Ghadami replied, agreeing to withdraw the unilateral notice and attaching a copy of the letter to Land Registry referred to in paragraph 28 above.  But he did not agree to the second condition.

 

68.       At 1244 on Thursday 15 November 2007 Taylor Wessing emailed another offer to Mr Ghadami. The offer was that if Mr Ghadami confirmed in open correspondence that he had no claim against the respondents and certain others, and undertook in open correspondence not to file any further notices against the respondents’ titles in respect of matters set out in the statement of case, then the respondents would not pursue a claim for costs.  Mr Ghadami replied at 1533 saying that he had already answered these points.

 

69.       In my judgment, Mr Ghadami never, as a matter of contract law, accepted the offers made by Taylor Wessing and no agreement that there should be no order as to costs arose from the exchange of emails.

 

70.       The other way in which Mr Ghadami put his case is that there was an oral agreement made between himself and Mr Reuben that, if the applicant were to withdraw its objection to the original application, then there should be no order as to the costs of the proceedings before the adjudicator.

 

71.       In paragraph 5 of his witness statement Mr Reuben says:

 

            I did not at any stage discuss the issue of costs of the Adjudication process with Mr Ghadami, nor did I agree with him that upon the unilateral notices being withdrawn, the Respondents would not pursue an order for costs against Blackraven or Mr Ghadami.

 

72.       In his witness statement Mr Ghadami replied to this paragraph:

 

            This is denied, see paragraphs 2 and 3 above.  If this goes to an appeal I will transcribe the recordings and will prove what was said by Mr Reuben …

 

73.       Paragraphs 2 and 3 of Mr Ghadami’s witness statement include the following:

 

            … There are telephone conversations between myself and Mr Reuben when he stated that he would get his people to write to me, in a later conversation Mr Reuben then stated that now I had reminded him of what he was said he agreed to it, this conversation is recorded and will be transcribed if the adjudicator orders it or at an appeal, subject to the order of the adjudicator.

 

            …In August for example, he told me that he doesn’t like my lawyer David Cooper and he couldn’t tell me which of his solicitors were dealing with this matter but he did know that he was advised not to speak to me.  Nevertheless he said he didn’t give a fuck about his solicitors and he would like to talk to me and asked me nicely to withdraw the notices and that there was no need for me to pay any solicitors as he would get the ball rolling with HBOS to enter discussions to sell or JV with me.

 

74.       In a letter emailed to Taylor Wessing on 2 November 2007 (at pages 251-252 of the trial bundle) Mr Ghadami referred to recent telephone conversations he had held with Mr Reuben on 21 August 2007, 15 September 2007, 19 October 2007 and 31 October 2007.  The oral agreement relied upon must have been made during one or more of those conversations.  There was no suggestion by Mr Ghadami that he had spoken to Mr Reuben more recently.

 

75.       Indeed, in an email sent at 1351 on Monday 12 November 2007 to the adjudicator and copied to Taylor Wessing, Mr Ghadami said:

 

            …I am minded to withdraw my unilateral notices … and that the hearing of 16 November next be vacated without any further order.

 

            I relayed this to Michelle Leonard of Taylor Wessing who requested that I write to you forthwith and copy to her so that she does not have to prepare any documentation for the said hearing, as she due to start.  It was concluded that this email is by way of consent and your urgent attention is requested.

 

            This is pursuant to my agreement with Mr Reuben, set out in my letter to Ms Leonard dated 2 November last (see attached).

 

76.       I find there was no agreement with Ms Leonard, as the email tries to suggest, that the hearing would not go ahead.  Ms Leonard sent an email to the adjudicator at 1627 on Monday 12 November 2007:

 

            Our client has confirmed that no agreement has been reached with Mr Ghadami/ the applicant as to the basis on which the notices were to be withdrawn.  Further, in the event that the unilateral notices are withdrawn, our client intends to seek an order that the applicant/ Mr Ghadami pays the respondents’ costs of the adjudication process.

 

77.       Mr Ghadami sent an email to the adjudicator and to Taylor Wessing at 1723 on Monday 12 November 2007:

 

            … Therefore I am happy and willing to withdraw my notices and if Mr Reuben doesn’t do what he said he would do, then it would be purely personal between me and him and will have nothing to do with the adjudicators or anyone else.  Please note that if Mr Reubens lawyers insist on spending time and money from this time forwards (my emphasis) then it is [their] own responsibility and under no circumstances would I be responsible for any costs incurred …

 

78.       What in my judgment undermines Mr Ghadami’s claims is that his letter dated 2 November 2007 emailed to Taylor Wessing (at pages 251-252 of the trial bundle), referred to in paragraph 74 above, contains no suggestion whatsoever that any agreement on costs had been reached between himself and Mr Reuben.  On the contrary, it concludes:

 

            I was also asked by Simon to either cancel the unilateral notices or write to Land Registry that any further action is to be frozen while negotiations are progressing.  I will of course do this immediately upon your acknowledgement of this letter and negotiations have started and by doing this will not prejudice either party’s position in any way and both [parties’] interests should be protected.

 

79.       Taylor Wessing responded immediately to this letter by email on 2 November 2007, admitting that a conversation took place between Mr Ghadami and Mr Reuben on 19 October 2007, but denying one had taken place on 31 October 2007.  It concluded:

 

            Our client’s instructions are to seek an order that the unilateral notices be removed from its registered titles, together with an order that you pay our client’s costs incurred in connection with this matter, at the hearing on 16 November.

 

80.       If an agreement had been made that the respondents would make no claim for costs, I would have expected Mr Ghadami to say so explicitly in his reply.  Instead, in dealing with this point in an email sent on 5 November 2007, he said:

 

There will be no need for an order that the [unilateral notices] be removed as I am happy to honour my promise given to your client that I will do so as he requested and in fact I am in the process of doing so but I need assurance from your client that he will honour his part of the agreement/promise given to me on several occasions as recently as 21August and 19 October 2007 as well as on 27 September 2006 when he promised to push the bank to sell at the ‘right price’ and 30 October 2006 etc.

 

81.       Moreover, Ms Leonard produced an attendance note of a telephone conversation she had with Mr Ghadami on Monday 12 November 2007.  Ms Leonard told Mr Ghadami that he was free to withdraw the unilateral notices if he wished to do so but that she would need to take instructions as to whether her client wished to pursue the costs.

 

82.       Mr Ghadami told her that costs had never formed part of his discussion with Mr Reuben and he would not agree to pay these.

 

83.       Mr Ghadami challenges this evidence.  Ms Leonard is an associate solicitor at Taylor Wessing and has worked there for 2 years.  She was previously employed by Nabarro.  Having heard and seen Ms Leonard, I accept her evidence, and prefer it to that of Mr Ghadami where the evidence conflicts.

 

84.       I prefer the written evidence of Mr Reuben to the written and oral evidence of Mr Ghadami where it conflicts as Mr Ghadami’s evidence is not consistent with the documentary evidence set out at paragraphs 74 and following above.  I regard Mr Ghadami’s repeated references to recordings of taped conversations as posturing.  He has not chosen to put this alleged evidence in.  Had he attempted to do so I have no doubt that Ms Holland would have objected to its admission by way of ambush at so late a stage when never disclosed.

 

85.       Accordingly, the applicant must pay the costs of the proceedings before the adjudicator, on the standard basis, from 27 February 2007.  This includes the costs caused and occasioned by the adjournment to the hearing itself.

 

86.       The respondents must within 28 days (it now being late December) serve on the applicant and the adjudicator a schedule of the costs claimed.  If a claim is made for the skeleton argument or counsel’s brief fee beyond that appropriate for a costs hearing, written submissions should be made as to why it would be reasonable or proportionate for the applicant to have to pay the same. 

 

87.       The applicant must serve on the respondents and on the adjudicator any objections to the costs schedule 14 days after receiving it.

 

 

 

Dated this 21st day of December 2007

 

 

 

BY ORDER OF THE ADJUDICATOR TO HM LAND REGISTRY